For price, watchdog will be an advocate

Citizens Against Government Waste made a name for itself by exposing government waste. But it has quietly made a lot of its money by lobbying.

By BILL ADAIR
Published April 2, 2006

WASHINGTON - Two years ago, the watchdog group Citizens Against Government Waste launched a lobbying campaign about avocados.

The group, which enjoys a strong reputation in the nation's capital for keeping an independent eye on government spending, plunged into an obscure agricultural dispute. It issued press releases and prodded its members to support avocados from Mexico.

Tom Bellamore, whose California Avocado Commission was fighting the Mexican imports, was puzzled. "I don't think avocados have much to do with government waste," he said.

Indeed, Citizens Against Government Waste did not reveal what motivated the aggressive campaign: It had received about $100,000 from Mexican avocado growers.

That's just one of many instances in which CAGW has traded on its watchdog reputation by taking money from companies and trade associations and then conducted lobbying and public relations campaigns on their behalf - without revealing that money changed hands.

The campaigns show how Washington lobbying often is done under disguise. When companies and trade associations want to give the appearance of public support, they pay front groups to create "grass roots" lobbying campaigns.

But the campaigns work best if the watchdog appears to be independent, so CAGW has not revealed who bankrolled its work:

CAGW took at least $245,000 from tobacco companies while urging the federal government not to regulate tobacco and to drop a lawsuit against the industry.

It received thousands from a health club association while promoting a bill that would give tax breaks for health club memberships.

CAGW took money from Diageo North America, a major liquor company, and wrote letters to Congress opposing government regulation of flavored malt beverages, which Diageo makes.

CAGW is well known and highly regarded for its crusade against political pork. Sen. John McCain is a prominent supporter and often cites the group's Pig Book of wasteful programs.

But to earn money, CAGW has ventured into issues that have little to do with government waste and has not revealed who is behind the campaigns . As a result, major news outlets continue to refer to it as "a public interest group" or "a taxpayer watchdog."

Matt Myers, the president of the Campaign for Tobacco-Free Kids, an antitobacco group, said CAGW is neither. "They are nothing but a voice of industry."

The "Pig Book'

CAGW was founded in 1984 to continue the work of the Grace Commission, which President Ronald Reagan created to identify waste in government. CAGW describes itself as "a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government."

Tom Schatz, CAGW's president, often testifies before congressional committees. The group has trademarked a toll-free number that illustrates its antigovernment philosophy: 1-800-BE ANGRY.

CAGW is widely quoted by the news media. In the past five years, its officials have been quoted in 43 stories in the Washington Post, 25 in the New York Times and 12 in the St. Petersburg Times.

"Americans everywhere should thank Citizens Against Government Waste for its tireless efforts to terminate waste and pork from the federal budget," McCain said in 2001.

The group is most famous for its Pig Book, a compilation of federal programs the group considers wasteful. This year's edition will be released at a news conference Wednesday.

The group portrays the Pig Book as the product of unbiased research, but in at least one case, CAGW used it to help a contributor.

The International Health, Racquet and Sportsclub Association, which has given at least $5,000 to CAGW in the past year, has long been critical of YMCAs because they are tax-exempt and they occasionally receive federal grants, giving them an advantage over privately owned clubs.

In the past four Pig Books, CAGW's list of wasteful programs mentioned federal grants to YMCAs. Also, CAGW singled out the YMCA money in its "awards" for frivolous spending, three times giving them the "Fiscal Unfitness Award."

Schatz, the president of CAGW, said the book's mention of YMCAs was not influenced by the money CAGW has received from the health club association.

He said, "The Ys are there because they qualify as pork. Period."

As a nonprofit group, CAGW is not required to reveal its contributors, and Schatz would not provide a complete list. He confirmed several that the St. Petersburg Times discovered through independent research, but he said many others did not want to be identified.

"If somebody wants to support an organization and remain anonymous," he said, "that's their right."

He acknowledged his group had taken money from groups such as the avocado growers for lobbying campaigns, but he characterized it as a small part of CAGW's work and said it fits within the group's principles.

"We have always opposed increased taxes and increased regulations on all kinds of issues," he said.

A fight over avocados

The avocado proposal triggered an intense lobbying fight.

The Mexican growers wanted to sell their products in all states year-round, but California growers didn't want the competition.

Bellamore's group, which represents the California growers, set up a Web site so members could send e-mails opposing the proposal to the U.S. Department of Agriculture.

The Mexican growers complained that the California Web site only sent e-mails that opposed the proposal, even if someone wrote something positive. (The lobbyist for the Mexican growers made this determination after sending a fake e-mail under the name Cliff Clavin, the mailman on Cheers.)

To respond, the Mexican growers hired CAGW to get its members to send e-mails supporting imported avocados. CAGW shipped a glossy packet to its members with a postage-paid response card. More than 9,000 CAGW members sent the cards or e-mails to the government.

CAGW also unleashed a flurry of articles and news releases. "Consumers Hunger for Fewer Restrictions on Avocado Imports," said the headline on one release. It quoted Schatz saying "taxpayers will no longer bear the cost of administering the complex regulations governing avocado imports."

When Bellamore first saw the CAGW campaign, he was perplexed. Why would a government waste group get involved in this?

Now he's more cynical. "If we had showed up with just a few bucks more," he said, "they would have swung the other way."

"The way Washington works'

Ron Campbell, a lobbyist representing the Mexican growers, said his clients paid about $100,000 to CAGW so they could match the California e-mail campaign.

"California has 6,000 growers," he said in an interview with the St. Petersburg Times. "We went to CAGW and said, "We need at least 6,000 or 7,000 comments to counter that."'

Campbell had no qualms about hiring CAGW. "Hey, that's the way Washington works, right? Nothing is for free and it's very expensive to do a mailing," Campbell said.

In the end, Campbell's side won.

CAGW was "extremely important in getting the word out to the average Joe in how the USDA was being deceitful in how they regulate produce. Without CAGW, it would have been difficult to get that word out," he said.

Schatz said his group had become more dependent on money from corporations and foundations because of shrinking individual contributions. The corporate/foundation money accounted for less than 10 percent of the group's revenue in the past but now accounts for about 22 percent.

"A front group'

CAGW has provided a wide array of services to help corporate groups with Washington lobbying campaigns. It has written letters to Congress, organized postcard campaigns from its members and written news releases and newsletter articles.

Congressional records show the group's lobbying arm, the Council for Citizens Against Government Waste, has written hundreds of letters to members of the House and Senate on issues that have no apparent connection to the group's stated mission.

CAGW urged House members to pass the tax break for health club memberships, a top priority for the health club association, and it urged House members to oppose "trade barriers" on importing milk protein concentrates, an important issue for food processing companies.

John Stauber, executive director of the Center for Media & Democracy, which tracks public relations campaigns, said CAGW is a front group that allows corporate interests such as the tobacco companies to stay in the shadows.

"The basic idea is to put your words in the mouth of somebody the public is going to trust," said Stauber, co-author of Toxic Sludge is Good for You!, a book about the public relations industry.

Stauber said groups such as CAGW should be forced to disclose their donors.

"If they were up-front about the fact that they are hired guns for the tobacco industry or big powerful corporations like Philip Morris, people would really be skeptical of what they are doing and what they have to say."

But he admires their well-chosen name.

"What a fabulous name!" Stauber said. "Who is for government waste? It sounds like a wonderful organization of patriotic people who are trying to make government better."

Times staff writer Anita Kumar and Times researchers Caryn Baird and Angie Drobnic Holan contributed to this report. Washington bureau chief Bill Adair can be reached at adair@sptimes.com or 202 463-0575.